Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-01-19-Speech-3-219"
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"en.20000119.8.3-219"2
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"Madam President, the revenue basis of the Tobin tax is said to be made up of very short-term exchange transactions. Such transactions, according to the argument, bear very little relation to fundamental economic variables. This has also just been underlined by Mr Désir. Therefore, according to proponents, such as Mr Désir, an internationally applied Tobin tax would, in principle, reduce speculative transactions and, hence, the volatility of exchange rates, which would lead to an improvement in economic prosperity.
Taking into account the considerable volume of short-term financial streams, even a low nominal Tobin tax would yield respectable sums of tax revenue. In reality, the motive underlying the increased interest in the Tobin tax and other sources of international finance in the mid-nineties was non-economic. Indeed, it was fuelled by the potential of this tax to generate income for international, public programmes at a time when demand for such funds was rising quickly and funding was increasingly harder to come by.
The Commission recently observed renewed interest in a global tax, such as the Tobin tax, as a means of achieving socially responsible globalisation, so to speak. Mr Désir too has mentioned this growing interest on all sides.
But if the Tobin tax were to be applied unilaterally in order to prevent attacks on a specific currency, then this tax could not be effective and it could harm the internal financial market. Put more strongly, in the long term it is possible that for large numbers of funds, the Tobin tax will be evaded by shifting foreign exchange rate transactions to off-shore tax havens. In that case, the tax could lead to a net loss of total economic prosperity. So the Tobin tax can only be effective if there is a sufficient number of industrialised countries which are prepared to participate.
Finally, even if the Tobin tax is designed to curb speculations with currencies, there is still the risk that even non-speculative streams would be affected, and that is not the intention. For the reasons set out above, I cannot see a good reason for introducing a European Tobin tax. At any rate, the Commission is against any attempt to restrict capital movement within the European Union. In more direct terms, to the extent that this measure could be deemed an indirect restriction on capital streams, this would contravene the Treaty of Rome.
The correct speculative approach, it seems to me, is to remove the real causes which lead to financial chaos, rather than attempting to suppress its symptoms by introducing obstacles to the operation of the markets."@en1
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